Nelson Mercado, of Linwood, uses a computer Nov. 23 at the New Jersey state unemployment office in Pleasantville. Mercado was laid off in September as a bar porter at the Atlantic City Hilton Casino Resort.

Michael Ein

Nelson Mercado, of Linwood, uses a computer at the New Jersey State unemployment office in Pleasantville, Tuesday Nov. 23, 2010. Mercado was laid off in September as a bar porter at the Atlantic City Hilton. (The Press of Atlantic City/Staff Photo by Michael Ein)

Michael Ein

Nelson Mercado, of Linwood, leaves the New Jersey State unemployment office in Pleasantville, Tuesday Nov. 23, 2010. Mercado was laid off in September as a bar porter at the Atlantic City Hilton. (The Press of Atlantic City/Staff Photo by Michael Ein)

Michael Ein

Nelson Mercado, of Linwood, uses a computer at the New Jersey State unemployment office in Pleasantville, Tuesday Nov. 23, 2010. Mercado was laid off in September as a bar porter at the Atlantic City Hilton. (The Press of Atlantic City/Staff Photo by Michael Ein)

Workers feel brunt of Atlantic City casino struggles as work force cut by 20 percent in five years

Nelson Mercado, of Linwood, uses a computer Nov. 23 at the New Jersey state unemployment office in Pleasantville. Mercado was laid off in September as a bar porter at the Atlantic City Hilton Casino Resort.

Michael Ein

Nelson Mercado, of Linwood, uses a computer at the New Jersey State unemployment office in Pleasantville, Tuesday Nov. 23, 2010. Mercado was laid off in September as a bar porter at the Atlantic City Hilton. (The Press of Atlantic City/Staff Photo by Michael Ein)

Michael Ein

Nelson Mercado, of Linwood, leaves the New Jersey State unemployment office in Pleasantville, Tuesday Nov. 23, 2010. Mercado was laid off in September as a bar porter at the Atlantic City Hilton. (The Press of Atlantic City/Staff Photo by Michael Ein)

Michael Ein

Nelson Mercado, of Linwood, uses a computer at the New Jersey State unemployment office in Pleasantville, Tuesday Nov. 23, 2010. Mercado was laid off in September as a bar porter at the Atlantic City Hilton. (The Press of Atlantic City/Staff Photo by Michael Ein)

Marley Pfeffer and Nelson Mercado don’t know each other, but
they sat side by side on a recent day at the state unemployment
office in Pleasantville, both peering at computer screens for job
opportunities that would put them back to work.

They are recent casualties of mass cutbacks in the slumping
casino market — an economic crisis that has claimed nearly 10,000
jobs in the past five years in Atlantic City’s dominant industry.
Casinos have slashed 20 percent of their work force since 2005,
according to employment figures compiled by the New Jersey Casino
Control Commission.

“Personally, I’m concerned, because you hate to see so many
people in your community lose their jobs,” said Michael C. Epps, a
casino commissioner. “Hopefully, when the economy finally turns
around, we’ll be in a stronger position and the jobs will come
back.”

As casino revenue has plummeted, so has the number of jobs. The
sputtering economy and the rival casinos in Pennsylvania have sent
Atlantic City gaming revenue plunging to levels not seen since the
1990s.

Revenue peaked at $5.2 billion in 2006, but dropped to $3.9
billion in 2009 and is down another 9 percent through the first 10
months of this year. If downward trends continue, the casinos will
gross about $3.6 billion in revenue from the slot machines and
table games in 2010, below the $3.75 billion in 1995.

Casino job cuts have accelerated this fall, reflecting the
wholesale seasonal layoffs that happen every year during Atlantic
City’s post-summer tourism slowdown. Just last week, Trump
Entertainment Resorts Inc. cut 250 workers at its three casinos.
Nearly 1,400 jobs were eliminated in September and another 756 in
October to reduce the casino industry’s total work force to 35,161,
not including the Trump layoffs last week.

In October 2005, casinos employed a total of 44,975 workers.

“It’s a reaction to the revenue declines in Atlantic City,” Mark
Giannantonio, president of Tropicana Casino and Resort, said of the
disappearing jobs. “Five years ago, we were a monopoly. Now, we are
surrounded by gaming across the border.”

Robert McDevitt, president of Local 54 of UNITE-HERE, the gaming
industry’s largest labor union, said many casino workers believe
they no longer have any job security.

“I think the average worker in Atlantic City is worried about
their future, no matter where they work,” McDevitt said. “They’re
very conscious of the overall problems with the industry in terms
of revenue and the number of visitors going down and the vacant
hotel rooms.”

Pfeffer and Mercado recalled how they were summoned into the
casino offices and told they were no longer needed. Pfeffer, a
bartender at Tropicana, was laid off in November. Mercado lost his
bar porter job at the Atlantic City Hilton Casino Resort in
September, just after Labor Day.

“Basically, they told me that revenue was down, that business is
very slow and that there were too many employees,” said Pfeffer,
27, of Ventnor. “I was hurt, discouraged. It’s a bad season to be
out of work. It’s nearly Christmas. I know the bills will start to
pile up.”

Mercado, 29, of Linwood, has grown frustrated by his inability
to find a new job. At the Hilton, he would work the overnight shift
and attend classes at Atlantic Cape Community College during the
day. He wants another job in Atlantic City that won’t conflict with
his classroom schedule.

“It’s really hard,” Mercado said. “There’s hardly anyplace where
they are hiring. You could end up on the streets.”

Declining since 1998

Total casino employment is now at levels similar to the late
1980s. It is well below the peak of 51,560 jobs in July 1997. When
the Sands Casino Hotel closed in 2006, about 2,200 jobs were
lost.

Brian J. Tyrrell, associate professor of hospitality and tourism
management at The Richard Stockton College of New Jersey, said
casino employment began to fall in 1998 and has declined in each
year since then except for 2000 and 2003. The growth was tiny in
2000, but was more significant in 2003 because of the opening that
year of Borgata Hotel Casino & Spa, Tyrrell added.

Atlantic City’s job cuts usually range between 2 percent and 4
percent annually, but jumped in 2007 in response to the start of
casino gambling in Pennsylvania in 2006. Some months in 2007 had
job cuts of between 8 percent and 9 percent. There was another
sizable cut in 2009 when the recession was in full force, Tyrrell
said.

Big swings in the casino workforce affect other sectors of the
local economy. Tyrrell explained that job cuts can cause “disarray”
for municipalities when they try to calculate the property taxes to
finance their operating budgets or for school districts when they
forecast their student populations and the number of teachers they
will need.

“Without a doubt, there is a ripple effect,” he said. “I know of
several people in the casino industry who have picked up their
roots and gone to other areas of the country where gaming is
growing. I’ve had neighbors move. I know of parents of soccer kids
who have moved.”

Other than state-mandated minimum staffing requirements for key
positions such as security and surveillance, the casinos are free
to adjust their payrolls in whatever way they choose. Epps, of the
Casino Control Commission, said regulators are concerned about the
shrinking workforce, but are essentially powerless to stop the
layoffs.

“It’s a business decision,” he said. “But it seems to me that
this trend is consistent with the national trend for job loss that
we have seen in the last three years as the economy has gone
through the Great Recession, as it has become known. Miraculously,
we had survived it for a long time, but the layoffs have caught up
to us and are now coming hot and heavy.”

Tyrrell argued that some of the job losses may not be as severe
as they appear on paper. Some are the result of more sophisticated
technology in the casino industry. For instance, the modern ticket
in-ticket out slot machines have eliminated the need for attendants
to collect the change from the old coin-operated slots, Tyrrell
said.

Many other jobs have been absorbed by the outside contractors
that operate the bars, restaurants, nightclubs and retail stores
inside the casinos. Those jobs are no longer listed in the casino
employment statistics, making it appear as though they were lost
altogether. However, Tyrrell said the restaurant, retail and
entertainment employees are simply working for another employer
now.

“A silver lining is that we’re seeing diversity in Atlantic
City’s nongaming attractions,” he said. “You see increases in
hotels and food and beverage and restaurants and bars and
entertainment for jobs.”

Pfeffer, though, fears that bartending jobs in Atlantic City
will be hard to find as long as the economy remains weak. She has
started to look outside the casino industry for job opportunities,
with the cruise lines one possibility.

“I was a bartender for two years at Tropicana. I once thought I
would stay in Atlantic City, but now I would be willing to move to
get a new job,” she said.